where -- he's gone again. >> he'll be here tomorrow morning. >> pilates again? >> i get to see carl tonight. 8:00 for that. make sure you guys tune in for that. kudlow kicks off our coverage starting at 7:00 p.m. by the way, happy 10-11-12 day. right now it is time for "squawk on the street". good thursday morning. welcome to "squawk on the street." i'm melissa lee live from the new york stock exchange. carl quintanilla is on assignment this morning. we begin with breaking news on sprint and softbank. david faber's been working this all morning. >> yeah. it's been like the old days, those phones lighting up. we got a lot of details to share but also a lot of questions. we can tell you for the last few months softbank has been in negotiations to buy a majority position in telecom provider sprint. now originally those talks also

included my sources tell me t-mobile. in fact, would have involved a deal in which t-mobile and sprint got together, something that has been discussed many times in the past. and then softbank came in with a very large equity check buying down significantly what was deutsche telecom's stake in the overall and perhaps buying even more from the sprint shoulder. that deal didn't happen. as we all know, in fact t-mobile has moved on, has a deal to acquire pcs. by the way, while there's been a great deal of speculation that sprint might try an jump that deal, i think we can put that aside for the moment because that's not likely to happen. pcs shares are down. there had been other reports in the japanese media that the overall value of the deal is $12.8 billion. i can't confirm that's the case. what i can confirm is softbank's main focus is on spectrum, becoming even more robust in terms of the spectrum position through sprint, for sprint. in order to do that, would actually also acquire clearwire

which has been a partner of sprint in building out wi-max and their various efforts and owns a lot of spectrum. sprint owns a lot of that clearwire spectrum as well. overall price is unclear at this point, how much of a premium it is going to be. i am hearing it would take softbank to somewhere in the mid 70s per ce. i don't know if they'll put in primary equity as well as buying out many of the public shareholders. there are also questions about sprint's debt. let's not forget a very heavily indebted company that has change in control provisions in its debt. unclear what is going to happen there. when you get a shareholder vote. this is a company that's been talking about doubling over the next five years. does softbank have the financial wherewithal to get the job done?

i believe they do but it is still a question. i will tell you factually, absolutely they are a week or two away from announcing this deal. that could change but they've been on a track for some time to get this thing done. so it is in process. >> you're way ahead of everything else on this story. why the common? taking a percent. this is about having enough financial stability to be able to integrate and take in the nextel, obviously one of the worst deals ever -- or clearwire. people should be careful buying the common stock. >> i think the common stock is where they are going to take majority control of the. >> y . >> you do. >> who is softbank? >> they are in japan, they are the distributor of the iphone. they're a major player. they have been very clear they want to go against their competitor, kddi. they are clear that they want to

compete, that they're out there and they want to be a player. sprint of course is the way that a foreign overseas company can gain access to the u.s. >> softbank said they could do a deal as much as $20 billion. this would not be that much but it does beg the question as to why sprint, given how bullish it's been in its own prospects would be willing to cap those prospects. you would have a public equity. don't know how they do it but they do it through a tender offer. i'm trying to get more details on structure here and frankly on the specifics of price. >> sprint preferred's been trading up markedly in the last few days. someone knew about this deal. it is really extraordinary they're doing this. dan hessy, ceo, has said over and over again he doesn't need the money. but who's going to turn down free money? >> are they going to take out public shareholders completely? to get a 75% stake you have to buy out much of the shareholders but i don't know what comes in addition to that.

in the japanese media there's ban $1 been a $12.8 billion number out there but i haven't been able to -- simply because people involved don't want to tell me. not sure whether that includes the purchase of clearwire through sprint or overall. let's hold off on trying to figure what the price is. >> how does clearwire build out its tdd, lt e! network play into this? they don't want to go and offer stock because their stock is so low. >> they're virtually bankrupt. >> they can't offer a bond because they have too much leverage and debt on their balance sheet but they need the money. >> they do. and they're partners. cable companies, intel, had been looking to get out. time warner sold. this gives them time to come in and take full control. it's been explained the motivation for this deal to a large extent was spectrum and it is softbank's belief that we are in the early stages of this revolution in terms of wireless and what they will be able to deliver an how they will be able

to compete with the duopoly that currently exists. >> they had to wait until it was clear what t-mobile was going to do, then they move. right? >> well, t-mobile got scared off by government concern that the deal would be stopped. that they would not be. by the way, having softbank in there as well certainly couldn't have helped things either. that complicates things. but t-mobile was a part of these discussions from what i understand when they began this summer. eventually it decided it could not bear the risk of an anti-trust review, worried given what happened with at&t it might happen again, therefore went and bought metro pcs. what's surprising to me is softbank still wanted to do it but apparently they did. these talks have continued. in fact i had been tracking what was, broadly speaking, i knew a potential deal out there. this is it. i can tell you without a doubt this has been going on for quite some time. >> softbank wants to be vodafone to sprint's verizon?

conceivably? >> yeah. >> remember, it is -- verizon does not own all of verizon wireless. >> that is true. >> it would seem that sprint's stock is still undervalued on this and clearwe're may be already overvalued. >> again, we don't know price -- are sprint shareholders going to vote -- say it is a -- are they going to vote in favor if there is a shareholder vote? still want to find out in terms of the change in control provisions in terms of the debt because that's important as well. are they in a position to pay back debt that's going to come? >> they can revise the heck out of the company. if softbank comes in they're able to refinance at levels that are no longer high-yield levels. >> by the way, the yen is strong, too. >> there's a lot of questions. >> big, big, big. one of the most asked about questions on "mad money" -- sprint, clearwater, people at home, don't get too crazy about clearwire. maybe get crazy about sprint.

>> we'll have more for you as well as we go along, try to get more details. a lot of risk harbingers have been in pcs shaf schls shares e overbid. i did hear definitively, at least as of now, sprint is not interested. >> it's just being hammered as you speak. your reporting hammered. >> both companies have been talking a good game. dan hessy of sprint saying things are great for us. clearwire cfo at a goldman sachs conference recently said if they do go to public markets, if they do get financing, she doesn't expect to be covenants on that financing so they'd be okay even though they have so much debt in order to build out this network which is, by the way, extremely important. this particular technology is extremely important. it is not just lte. it is tdd lte. that's an international standard

which china mobile uses also. >> i keep thinking you leverage that balance sheet. they suddenly have a balance sheet to leverage. verizon and at&t are suddenly saying, holy cow, the world has just changed. t-mobile -- remember, at&t had almost destroyed t-mobile's momentum when they did the deal. >> t-mobile is still not growing. it is going the other way which begs the question in terms of the synergies they're talking about achieving with pcs. >> deutsche telecom, billing balance sheet. you have two capitalized players -- you only had two before, now you've got four. >> it's possible. >> what's your gut feel on whether -- sounds extremely complicated. >> it is extraordinarily complex. >> what inning are we in? >> we're far along. my sources are telling me that it could be in fact within the next two weeks, if not sooner, that they could get a deal. it does not appear to have been sidetracked at least as of yet given the leaks. this first was reported i believe in tokyo.

i would assume maybe it came out of the soft bank side. >> follow this every step of the way. follow this every step of the way. other an sirius xm, this is what people are in, whether it is right or wrong. it's what they're in. >> if the pcs deal and this goes through, that's probably the end of the consolidation in this industry. there really can't be any more -- >> dan hesse's been talking about consolidation. of course yesterday their executives were at a deutsche bank conference in scottsdale, arizona talking. interesting. >> verizon picking up share because of the iphone. this group is on the move. >> it is. the cfo i think today is speaking at that conference of clearwire. >> of course, melissa, as soon as i can get back to the phone

we'll hopefully have more details for you specifically on some of these key questions. let's talk about the overall markets. stocks are looking to bounce back after a disappointsing start to earnings season. dow taking a 128-point hit yesterday. this morning an upbeat call interest citi group. the firm upgrading u.s. equities to overweight citing a combination of strong earnings momentum an easier central bank policy by the end of 2013, jim, they are projecting 16.15, which would be a gain of 12%. >> 24 hours ago, presprint of course, people had had given up on equities. the death of equities story came back again. it was amazing. you had a couple bad days, two of the worst days back-to-back since july 23rd, 24th. everyone wants to short everything. good luck to you. this is a fluid market. turn to alcoa as a way to look at it. alcoa says 2012 slowing down, china going to put on the jets 2013. everybody focuses on 2012.

2013 not in the ballpark. this is an exciting take again. you have deals, people saying don't give up on 2013. vice presidential debate tonight. fiscal cliff. the gulf between the bulls and bears, very big. >> that makes for what? volatility? >> i think so. i think it makes for every single earnings report being a volcker name. >> with that huge gap in between the bulls and bears, look at alcoa for instance, in the after hours popping because it looked like it was a better than expected report. yesterday it was a dismal day for alcoa by the end. a dismal day. >> i thought that people just misinterpreted the comments entirely. china realizes it had understimulated. remember china can turn on the jets if they want to. though of course, that's the

greatest short story ever told. once again china is not just dead, it's the china syndrome. boom. and meantime, china springs eternal. >> maybe so. so does a lot of debt that they've got buried in all sorts of places. i'm going to take the other side of that trade, i guess. i sound like those "fast money" guys. >> hey! >> holy cow. meanwhile i have to tell you that santander -- i don't want to hear about a lot of your stuff -- just kidding! santander is not down despite the spanish downgrade and they are a huge suppository of spanish bonds. >> i'm still reeling from the fact -- >> i'm joking! i am hung on your sprint word. i was sending you e-mails say this is it. blow this show up. >> i agree with you whatever you said about santander. i love hearing you say it.

>> these are important touchstones for me. >> indeed they are. just quickly on the citi note, looking at some of the top global stocks because it is an interesting list -- aetna, bhp, china mobile, csx, goldman sachs, google, qualcomm. if we can show people where they see the growth around the world for 2013. it wasn't just a u.s. call. it was a global call. in part this call was an underweight of japan. curiously though, they see the topix in japan rising 25% even though they moved to an underweight rating on the stock. so that's curious. we do have an e-mail in to citi to ask about that, how can you be underweight and see a 25% gain over the next year-plus. >> worried about japanese banks, too many bonds, machine tool numbers out last night. >> and automakers. >> if china shuts its market to japan, the political implications of this new cold war between the two, you're not going to be able to sell in to one of the greatest markets that

everybody's hoping for. it is political but the chinese in the end just like they did to google -- the chinese have -- they care passionately about political issues. >> yeah. absolutely they do. >> they trump even money. >> as we point the out watching those tensions between china and japan very important. let's move on to jpmorgan cfo douglas bronstein. he may step down in the next quarter. he may take on another post within jpmorgan. he's among executives undergoing scrutiny or at least have been suffering a lot of stress as a result of jpmorgan's trading losses. goldman sachs bracing for more revelations from ex-employee greg smith announcing his resignation from the firm in a "new york times" op-ed. the "financial times," one gold man employee is quoted as saying it feels like a drive-by shooting for people here. steve leisman today exclusive

with ceo of goldman sachs, lloyd blankfe blankfein, as well as simpson and bowles and they're not a singing team. they are the duo behind of course what might have been a very sane fiscal plan for the country and they have a lot to say about that. as for braunstein, he was not directly involved in any way in the london whale trading. that did not report in to him. but you can imagine as cfo it is not the easiest of times to have been through, that the job is a very, very difficult one. he had been the preeminent banker for many years at jpmorgan and actually had been very happy in the cfo role. whether or not he's leaving in the next couple of quarters or not, if that is the case -- of course you do need to communicate that to your boss and figure out what you may want to do in the future so we'll see but i think that's become an extraordinary difficult job at any big bank, certainly one that's been under the scrutiny of jpmorgan. >> it feels like a purge. it feels like a purge. anyone who was involved with the whale just tangentially, seems

like right down the line -- plus we read the story about the potential criminal prosecution. >> fbi may be making an arrest -- >> it does have that feel to. i'm not sure braunstein given the chain of command -- but at the same time he was the cfo. they have earnings tomorrow. that's what he and the market will be focused on whether it comes to jpmorgan. >> their stock has been red-hot. back down where it was pre-whale. it is kind of like "star trek," "save the whales." >> that is a good one. >> it was. >> all right. coming up next -- real estate services giant has found a home here at the big board once again. the parent of coldwell banker and century 21's ceo will be

here. how can facebook succeed? meet the ceo of a company that might be the solution. let's take another look at futures. looks like we are going to end -- or snap this losing streak we've been on. the dow looking at 60 points on the open. much more straight ahead.

we don't call this our company, we call this our mission. green toys teaches children that if i have a milk jug and i stick it in the recycling bin it can turn into something new. chase allows us to buy capital equipment

to be able to manufacture in the states to the scale we need to be a global company. with a little luck green toys could be the next great american brand. find what's next for your business at chase.com/mainstreet real estate brokerage firm realogy holdings pricing shares at the top of the proposed

range. they own coldwell banker and century 21 sold 40 million shares for $27 a piece. we'll talk with the ceo, richard smith. this is the second time around for realogy to go public. >> it was purchased by apollo. it was an lbo that was done at about 12.7 times at the height of the market. it ran into significant trouble but apollo managed to keep it from filing and in fact went into the market, sold big convertible ventures that people are going to be converting -- paulson, york, and a great piece of paper for them. apollo as well. it's funny, if you were part of a fund that invested in realogy in the lbo, you are probably going to take out 10 cents on the dollar on this deal. if you were part of the apollo fund that invested in the debt,

you did really well. >> oh. >> like sprint. >> the most important thing is this is a pure play on housing and people are really looking for that. even more so than the builders. >> more than zillow, because this is a play on transactions. >> not the ads, not the subscriptions for access, et cetera. >> when you see an increase -- yesterday there was a terrific piece put out by the national association of realtors about the appraisal problems, how things are not appraising. that's slowing down the process. if you can get appraising, if you can get banks to refinance, to give you a mortgage, then you will see more transactions which means this stock is a huge buy. let's see where it opens obviously. don't want to say, hey, it's good. >> we got a lot more on it. >> that's going to happen just behind us so we're all over this story. finding opportunities after yesterday's sell-off. cramer will show you the way. up ahead, "fast money" report steve leisman has an exclusive with lloyd blankfein,

alan simpson and erskine bowles. we are looking at an up day here on the street. much more "squawk on the street" strayed ahead. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.

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and the splattered paint pattern, your lights are on. what? [ male announcer ] the endlessly customizable 2013 smart. time for cramer's "mad dash," ahead of the market open. use a name we haven't talked about this morning -- federal express. >> i looked at what caused the sell-off we've been enduring for some time now. fedex first said global trade

going to go down. then few weeks later they actually report their earnings. then they even hammer home that it is worse than they said a few weeks ago. another leg down. transports. suddenly they have a meeting. it is a wand waver and they wave it and bank of america raises numbers fedex. next thing you know the stock is above dramatically where it preannounced. which never sold off that much. >> which was something you pointed to. >> we talked about that $84, $85 it wouldn't penetrate. why? fedex is regarded as the future of transport. big asia, i'm coming back to the fact that china is becoming a battleground. there's the short seller saying china is falling off a cliff. there's the klaus kleinfeld view. i love saying his name.

>> $100. you heard it from jim cramer. we got realogy's ceo coming up. stock's going to open for trading moments from now. stay with us. ♪

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there you have the opening bell. it is a thursday morning here at big board. realogy holdings's ceo cwill be here. we should note realogy priced at the higher end of the range but two other ipos at the nasdaq today -- intercept pharma which was oversubscribed along with kifera. >> life lock versus realogy.

it is just each day is a new day. >> what a difference. >> realogy is going to be interesting. hasn't opened yet. you can't imagine it would be too much of a pop. prices around 11 times 2013's taxes. by the way, that number is still 40% roughly below '06 levels just to put that in some perspective. >> housing prices are at 40% -- >> even though the exit multiple in '07 was only 12.7 times. it is coming back at 11 times. >> we are showing the screen there and the way you read that, priced at $27. as time goes on and it is closer for this thing to go live, that should narrow. >> people want to play a return in housing.

from 500,000, 600,000 starts going back to maybe a million, transactions that were major part of the gdp. using this as the proxy, right or wrong -- >> that's right. this company benefits from increases in price and volume. more transactions at a higher price, and that is the positive. that's why you would want to own this stock. it is worldbank or century 21. it is also nrt. they own a lot of smaller real estate brokerages. they also have a title business but those are the keys and it is a pure play. and hence, $32.35 right now. >> what does it say for banks that own so many homes? what does it say for fannie and freddie? this is a stock people say i wanted a proxy for housing. you just gave it to me. same way owens-corning was the proxy last week and blew up. >> we'll bring you the opening trade when we have it. kelly evans has been digging

around on these jobless claims numbers. there was some dispute over the accuracy of these numbers. something about a large state not reporting its numbers, so therefore skewing the data. what have you found? >> melissa, it is another case of a jobs report that is sowing confusion. we just saw the labor department report a big drop in jobless claims last week to a four-year low. that immediately had people thinking perhaps that the labor market had substantially improved. what is actually happened is that one large state did not turn in what appears to be its typical quarter-end or beginning -- quarter beginning processing figures. when those happen, because of the way that emergency and extended benefits are now offered, there's typically a big increase in refilings and reapplications. the labor department adjusts for that expecting that increase to sort of smooth it out so it doesn't appear as though there was a big increase in layoffs. because that state didn't have those figures come through as expected, the figure this week appears to have been lower

necessarily because of that, then because necessarily of any labor market strength. the bottom line is that next week, because we aren't likely to get that give-back, you can see the pace of claims on a seasonally adjusted figure. we'll get more on this next week when state level data is released but now it is probably looking through at least this week's move and putting the claims more in context. the drop is likely exaggerated by issues relative to one particular state last week. >> this number is not clean, bottom line. got to look to next week. kelly, thank you very much for that. here we have the markets higher, s&p up by .6%. caterpillar downgrade this morning, this was an interesting one. rbc cutting in a sector perform from outperform, price target $95 a share.

this seems a little bit johnny-come-lately to the party when you look at how caterpillar stock has been trading over the past several months. >> tough to tell. there are still of the 15 major firms that follow, nine still have it as an overweight or buy. there's still others hanging on. clearly 2013, hope springs eternal. i think caterpillar if it can get back to $80 on an earnings basis they are currently using is not expensive. but yes, another battleground stock. yesterday walmart intraday hit a record high. really strong move on the back of the analysts meeting, some optimism about the company's strength in terms of sales. two retailers yesterday, costco and walmart, both did very well. one's trading at something like a 27 multiple. walmart is trading at a 15 or so. >> costco has that annuity stream. obviously it is a hybrid -- it

is really a hybrid retailer because of that stream. these employment numbers come out and there's these guys who make it political. i have no interest in making employment political. i say that number's strong, maybe that explains why walmart is so good. maybe that explains why nordstrom could be good. in other words i'm looking at it a little more empirically and less of whether it is something that obama fixed or not because that doesn't make me any money. call me old-fashioned. >> walmart's also been buying back a lot of stock which has been helpful. an interesting story on walmart that's not been fully discussed, that it almost became a controlled company. the walmart family owns a great deal of that stock, together i think they represent the single richest person -- they're not together, clearly. but they had to contribute money to the foundation or stock to the foundation to make sure they did not become a controlled company. interesting just to keep in mind as a side note to the walmart story. >> do you think walmart's back? >> stock market certainly tells us so. >> it does, doesn't it?

i actually felt that it never really lost its way, but lee, lee scott, did a good job. obviously people felt the stores weren't good looking. i go to my walmart, it looks real good. it looks like target. >> all right. let's check in with bob in this crowd behind us. bob, when can we expect the first trade? >> it's going to be a while for realogy but they just increased the size from 332 to 35. somebody said the ipo is like a prize fighter in the tenth round. it's taken a lot of lumps, beaten up pretty badly but it is still standing. a flurry of deals today, pretty impressive numbers here. two biotech deals over at the nasdaq. both priced at the high end of the range and they increased their share size. biotech and pharma increasing share size? that doesn't happen very often. there's another ipo, this is the

commercial stock photography firm shutter stock. priced at $17. $13 to $15 is the price range. indications are $21 to $23. $13 to $15 price talk yesterday, opening $21 to $23? that's interesting. let's talk about realogy right here. $27 price, $32 to $35 here. i guess the question is, are ipos back in a way? two observations about this. one, it is not surprising to see an increase in ipo activity. folks, facebook was a disaster. a lot of stuff got push off of the calendar and we got a normal seasonal push now into september and october. it is not surprising that some investors are desperate for some kind of growth in a low growth market. they're looking for anything that can move.

everybody went out and bought home depot and bought all of the home builders. there's nothing else to buy. there's all at new highs. here we have a new player with modest prospects. a number of them got big haircuts in the last few weeks i'll talk about in a little while. important thing is the big ipo is actually coming tonight and that's going to be work day, the cloud computing firm from the founders of peoplesoft. that's got the most excitement. we'll talk about that a little bit more. $32 to $35 right now on realogy. richard smith is standing there waiting to make the first trade. be four, five minutes. >> this work day is going to be what facebook should have been. it is a deal that's going to be priced to make everybody money. i think these are important things to bring back to some people who have been just decimated, as we know. let's shift o bonds and the

dollar. rick santelli at the cme group in chicago. >> today was a double-punch in the marketplace. look at these charts for intraday, our 10-year, our 30-year. bund. the s&p 500 futures before the big stock exchange opening. what do they all have in common? they had a twofer increase in prices or yields. we saw that around 8:30 eastern. the huge 30,000 drop in jobless claims, forget about explaining it. just look at it for what it is. of course that gave us the first thrust but the second thrust may have to do with the eu postponing basel potentially for a year. you heard jamie dimon as we kept cutting in to him yesterday. is he excited about basel? he's not excited when global rules are made for u.s. banks. you know, the united states makes their own rules an what's in their best interest, but nonetheless this seemed to be potentially an afterburner for the second wave. the headline started showing up

kind of around 8:00 eastern, but right between 9:00 and 9:15 is when all the very specific headlines came out and it seemed to time out well so we need to pay attention for that. of course especially how it impacts not only our banks but the european banks. jim, back to you. >> all right, rick. great to hear from you. let's check out the latest moves in energy and metals. sharon epperson? >> things are flying literally. that's part of the tension that we're seeing now is in the airspace, not even just on land between turkey and syria after turkish jets actually forced down a syrian passenger plane suspecting there may be weapons on-board. now a lot of traders are focusing on that factor as another et calculation scalatio. they're also concerned about heating oil. that's going to be the focus of the energy report. the american petroleum institute last night reported a huge

decline in distillate fuel supplies down by more than 6 million barrels. that's going to be key focus as the energy department has already said home heating bills for heating oil are going to be the highest on record this winter. keep your eye on natural gas as well. we'll have the natural gas inventory data coming out at 10:30 a.m. morgan stanley expects because of the supply picture and escalating demand we could see natural gas at $5 by the first quarter. back to you, david. >> thanks very much, sharon. want to return to our lead story this morning. softbank in talks to acquire a majority stake in sprint and also then buy control of clearwire, sprint's partner. those talks continue. a deal may be done as soon as the next week or two according to people close to the situation. many, many questions here though overall in terms of the structure of the deal, which i am hearing would result in softbank ending up with what has been described to me as a 70s%.

that's not an exact science. others say two-thirds. i'm sticking with my sources on this. overya overall stake in the country, the remainder would be public. but one key question -- will sprint shareholders want to sell out of what the premium is. we have a lot of conjecture on that number. $640, $630. but will they be able to sell at that number given this would appear to require a shareholder vote or would they be happier perhaps if sprint was able to resuscitate talks with t-mobile which, by the way, was a part of this potential deal when the talks first started this summer. that being t-mobile, sprint, then softbank all coming together in a way that would really help the germans with an exit. they chose not to follow that path because of worries about antitrust. but metro pcs are in the process of buying it. think we're getting a price on

realogy here. >> we're still waiting for realogy. shutter stock is the other new issue here at the new york stock exchange, that just opened. hence the applause. >> animal spirits out of nowhere. think about it. animal spirits versus yesterday. this market has taken on a level of bipolar that i've not seen other than in homeland. >> which is fictional, by the way. fictional. >> it is? >> yeah. it is fictional. >> there's a look at shutterstock. we'll try to give you more details in terms of sprint, clearwire an softbank. as i reported previously, softbank's main interest seems to be in the spectrum position, not just the sprint but its partner, clearwire, gaining control of that spectrum, being able to offer a more robust set of products as a result of that spectrum to compete with the likes of at&t and verizon. lot of questions. talked to a couple of large shareholders, jim, who say, they

like the strategy, they've been happy with sprint. it is not clear to them why they would want to go down this road. >> interesting that sprint -- the issue had been whether they have enough spectrum. an issue had been whether they'd get rid of clearwire because it will been such a liability. this new injection of capital changes the corporate structure. i think that's what people don't realize. they look to common stock an think that's all there is to it. >> there is a huge balance sheet here as we know. still $20 billion of debt at sprint. something along those lines. there are change in control provisions, by the way, in some of those debt agreements which essentially mean they come due if somebody buys more than 50% of the company, changing control. this would be that. not clear how they're going to deal with that. we'll see. pcs shares for its part are down sharply as we told you. sprint is not at this point interested in talking -- >> bankers? bankers? >> what do you mean? who are the bankers? >> yes. >> i know a couple, i don't want to share them. >> goldman at $1,230.

you at least want to askyd blankfein is this your deal? >> that could be a helpful competitive edge that i know who they are but they'll get out there eventually. >> we're still awaiting realogy, till $32 to $35. as soon as that trade crosses we will bring that to you. overall, jim, a positive tone for the market. energy stocks are back up after getting battered around yesterday. financials are higher as well. pretty strongly up across the board, this ahead of jpmorgan, also wells fargo reporting tomorrow morning. we'll get a pretty decent read of the banking industry overall when it comes to banks that lend, banks that do investment banking, by this time tomorrow. >> it is fascinating to me that this deal is one of the reasons why bank of america has got life. bank of america owns a lot of homes. if we get m and a, we have high-profile thieves coming to

the bank. momentum can shift on a dime. on the oil, sharon epperson, last comments she made -- natural gas, morgan stanley, $5. that's a big change. big change. >> bob pisani tells me $33, $33.25 on realogy. that's very close. >> the tighter the band, the closer we are to this thing going live. >> the brands are all familiar to everyone. we have major real estate. you see the signs on the wall. that's what we're looking at. >> false alarm. >> i want to go to the jamie dimon comments yesterday about shale gas. this is one thing -- he said a lot of interesting things in a very jamie dimonesque way which makes everything even more fascinating. he said god gave the u.s. another chance. he said you mess up -- paraphrase -- you mess up energy policy, we're going to give you a second chance with shale gas. get it right this time. >> being pressured by the epa.

epa a lot of people feel, listen, look out for a renegade epa if obama is re-elected. what will happen is they will put a temporary ban on fracking. obviously hollywood favors a ban on fracking. when it comes to mindset, hollywood can set a mindset. even though fracking clee yatre lot of jobs, ruins a lot of water. >> there's not a lot of proof around that. >> this is what the north dakota -- people are most worried about. fraccing in north dakota, it's the state with the lowest unemployment rate in the country. this is a battleground issue. i think fracking we got to stay close to it because it is crucial to american jobs. it is a big job creator. >> coal stocks continue on their tear. if you looked at the coal stocks, kol, etf, since the debate they've gotten a little.

a lot more analysts are bullish about a possible switch, switch back to coal from nat gas as nat gas stays in this $3 range here. >> if nat gas goes over $3, you switch, that's west coast coal, that switches right back to coal. eastern coal is $4 to $5 so nat gas still has an edge at $3, $3.50. i don't like the balance sheets of a lot of coal companies. american-electric power is the one that has the most at stake in terms of obama winning or losing in terms of the amount of money that they have to put in southern sos and other v stocks have lagged. people fear obama will root the goal post so even more money has to be put in for coal. >> $32.75, $33. >> we're that close. >> can taste realogy. speaking of taste, yum! brands giving up some of its gains -- >> i'm just kidding.

look, i like -- >> have you had the dorito shell taco? >> no. and i haven't had their new chipotle -- some new research out saying trends are good. obviously the 12% to 8% of same-store sales has drove chipotle down 100 points. there is so much premature clapping. >> they're playing tricks. we turn around, nothing. >> there's multiple bidders for the stock. just like there's multiple bidders for real estate. >> back to yum! brands -- so webb bush is bullish on yum! brands but cut the price target down to -- chipotle -- excuse me. yes. cmg. >> yum! brands in the end is a chinese stock because they own the stores there. they presented a very bullish outlook on china. china is right now -- we're looking at electricity. we're looking at every single data point that we can get to try to figure out how bad or good china is.

china has a huge infrastructure that people think is built out when it comes to, say their sewer system? it is like mao built the suer system. that was a while ago. not sure if you've seen his work. >> they have a big statue of him in tiananmen square. is that him? >> yes. >> will you guys open it? sorry. >> they thought about it for a second. >> come on! >> again, this is not the only ipo to debut today. shutterstock opened on the new york stock exchange. that still holds on to a 30% gain from the issue price. we have two biocarbons at the nasdaq -- again, fake applause. two ipos at the nasdaq which still have not opened. we are waiting but both of those

issues were oversupplied as well. brisk demand for ipos as we await realogy. rlgy. >> some of these biotechs, gillead down. i think when there's ipos in that sector it does tend to buoy the whole group. how are the other real estate plays doing? when you look at z for zillow, that's coming back. >> i'm out of things to say. i want to make phone calls. >> out of things to say? >> google shares are up very sharply. up by 1.4%. that's a nice move here on google. >> we've got think equity raising price target. the chairman last night on all things digital says there's 500 million droids.

that's obviously something we don't talk about enough. samsung is droid and samsung's doing incredible. samsung's apple, too. it is a true frienemy situation. >> he looks at you and says frienemy. bob? >> right now $32.90 to $33 is the indication. i've gotten questions from people why is it taking so long. auctions here at the new york stock exchange on the ipo are real auctions. they combine elements of human beings putting in bids. here's danny standing right here. he's got big orders to go in. he wants to buy this right now, as well as in electronic marketplace as well. there's eddie over there. he's the specialist, what used to be called the specialist. he's taking all these orders from the traders here on the floor. they're big orders. he has his ear to the phone with the book runners with goldman sachs as the lead here. they're giving them indications of what kind of orders they are having as well. there is a process with a lot of

people that are involved. sometimes when you get a lot of demand, you see the prices move around a lot. we've moved around several dollars in the last 15 minutes. they're trying to get that one price, the pairing off where the buy and sell orders are roughly the same where they can open it at the right price. that's why it's taking a little bit longer. i do want to know, we had shutterstock open at $22.50. $17 price, $13 to $15 price range? that's a huge move to the up side. this is a company that's a commercial stock photography. not an easy category. my point here is that people are desperate for some kind of growth in a low-growth environment. there's a company even though it is hard to categorize that's had notable growth. here's another company that's a play on the real estate industry. still right now $32.90 to $33. >> i think it is just going to be a couple minutes, folks. bear with us. >> couple minutes, bob. >> we've got a couple of companies very much on the move. i think this linkedin. very overvalued stock on an earnings basis -- >> you like linkedin. >> you want momentum, linkedin lass it.

momentum obviously trumps at times valuation. people saying that the quarter could be much better than spefktespefk expected. johnson controls looks like to be the next one that's going to not be able to make the numbers. wells fargo goes buy to hold. europe, we've totally forgotten the fact that europe -- spain did get downgraded. >> it's funny we haven't mentioned that at all today. >> isn't that incredible? that was the dominant theme in europe that perhaps this downgrade is going to cause the spanish to say, listen, we do need the bailout, $200 billion needed in spanish bonds in the next couple of years. >> the s&p move though is still to one notch above junk. the moody's downgrade was the one that we are still awaiting as they continue to assess the spanish situation and that would propel it into junk territory. but this is obviously a story that we continue to watch and a ratings change could hays ehast

process in terms of request for bailout. >> stories gary cohen says -- number two at gold man, that perhaps the euro can't survive. obviously the euro's been an ascendent here so that's a little contrary to what the current market is saying. a lot of the strength in our market has been the currencies for a lot of the drug companies going to be very positive. estimates have to come up for the drug companies. >> while we got you here, jim, given we're counting down to the end of this 9:00 hour, let's do six in 60 from the set while we wait for realogy to open. chipotle is one we've already talked about this morning. >> i think chipotle is the crosshairs of all the short sellers. until you see the actual number it is going to be unclear, up down, up down. >> apple? >> the big beneficiary i would believe of sprint might be apple. it might be apple. now you got four players all fight -- >> do we have it? >> up 21%. >> $32.85.

>> up 21%-plus. goldman and jpmorgan the lead underwriters on this. >> apollo. >> bob, we got a little more? >> $32.85. let's recap. it priced at $27. that was the top end of the range. opened at $32.85. people kept asking why is it taking so long. by and large, the book runner ultimately will call in these kinds of situations when it is going to open. they'll simply say we still have more, there's still orders coming in. normally these things at the nyse open between 9:40 and 9:45. this took a little longer. $32.85. richard smith over there just walking away shaking some hands. he's the ceo. we'll be talking to him very shortly. shutterstock is trading at $21.77 right now. it opened at $22.50 after pricing well above the price

range as well. we're waiting over at the nasdaq for intercept and kyfera. they'll probably open 10:25, 10:30. that's typical for nasdaq openings. they, too, priced at the high end of their range and also increased their share size. great day for ipos. see if that continues. back to you. >> thank you, bob pisani. we'll await those openings of the other ipos at the nasdaq. next we do have a live interview with realogy's ceo. steve leisman will talk with alan simpson, erskine bowles and lloyd blankfein at 12:30 eastern time on the "fast money halftime report." a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.

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you've been with the company for a long time. richard smith, there have certainly been tough times along the way. >> i've seen the best and worst of our industry. we're happy to be here. >> many view you as a pure play on housing. is that a fair assessment? >> absolutely. that's why we're here today. this is a unique time in the history of housing. unique time in the history of the economy of this country and this is absolutely a pure play. we're not a builder. we're not a retail. we're not home depot or sherwin williams. we are a fee-for-service. we represent 93% of the business. so it is a terrific opportunity. >> the company went private at about 12.7 times, there are those who say that that number itself may be overstated, that you take a lot of one-time expenses that should be excluded. how do you respond to those who say those one-time expenses keep occurring and therefore we are a little concerned. >> actually one-time expenses

will abate over time. those are legacy issues. i think the real attractiveness is the free cash flow generation of this company. we're essentially eliminating half of our interest expense. deleveraging of the company and a macro environment will contribute substantially to the benefit of our shareholders. >> you think you can also refinance? you have about a 7.5% cost-to-cap at this point. >> listen, this creates optionality and we're going to be in the position of having the option to do a variety of things that we couldn't before. so we're uniquely positioned to capitalize on an improving market, housing in particular. >> mr. smith, people say real estate -- location, location and its local. give me the hottest markets. where should people be looking at to buy homes right now? >> florida is often written off. florida has recovered on the unit side. it is starting to improve on price. if you were waiting to buy that vacation home, you should do it now. the coasts are very hot. they always have been. new york city is one of the --

the largest real estate market in the world. extremely attractive. still great price values in new york but there's no inventory. if you have a property you are willing to sell, now is the time to do it. >> lead story in the money section of "usa today," fewer homes go back to banks. if we get rid of this short sell are we going to be be maybe going back to a million homes trading a year? >> what's interesting bank inventory right now is at an all-time low. >> isn't that something? >> again that's a byproduct of a recovering market. >> if there's one headwind out there that is or might be ham r hampering this turn in real estate that we are seeing, what is it? lending standards? appraisals? >> what's interesting about the lending environment right now is the lending standards are incredibly difficult. they're far more difficult than they should be and that was mentioned in one of the recent debate speeches, if we could just have a change in some of those regulations, the floodgate will open. now as a headwind, it is always regulation. so it is always our friendly government. i don't control that and we are doing quite well in spite of

that. we're pretty bullish going forward. regulation would be dodd-frank, qm and qrm. do i believe they'll be resolved some time in the first half of next year. >> but an environment in which the current regulations stand, just assume that it is status quo for the foreseeable future, will that prevent the housing recovery from being as robust as it had been during the peak times? >> well certainly stronger with the right regulation but what's interesting is the recovery is occurring in spite of that. that's a very strong test amount as to the strength of housing right now. >> you've cut a lot of costs as you've had to over these difficult years that the company's been owned by apollo. are you done with that? >> we pride ourselves on being very efficient from a cost perspective. in a recovery not only do you get the macro, the deleveraging, you get the benefit after substantially different company -- >> a lot of that was job

reductions. >> we reduced our staff by 30%. >> sir, zillow came public. do you really niece these companies? >> they're great end suppliers. they're great marketing alternatives to classified newspapers and that's the niche they've carved out. they're doing a good job from that perspective. they're generating leads. economics come back to us so it is a good relationship. >> when do you think commissions will come down. commissions you pay in manhattan are way higher than any other leading capital -- it might be 1.5%, 2%, 2.5% in the uk where i came from. is it perhaps a lack of competition? >> no, quite the opposite. in fact commissions in this country are negotiated across kitchen tables every day. the inefficiency of that makes it almost impossible to change

overnight. commissions have moved one or two basis points a year during the best and worst times of our industry. now as to how it happens. in the balance of the country? every aspect is different. the economics are different in the uk. we don't have the transfer tax. we don't have many of the taxes that are necessary to close a real statransaction in the uk. >> that's a very high rate. why hasn't that come down? >> it is what the market will bear. it is literally what every market will bear. whatever is customary in a market. we still have 7% markets, we have 6% markets. in manhattan if you're selling a $25 million apartment, you're not going to get a 6%. you may get 4.5% to 5%. it is literally what the market will bear. that efficiency has made us unique in the world. >> in terms of the move from home rentals to home buying, what's a better environment for you in terms of profitability? >> in new york city we are on

both sides. we own city habitat, the largest rental brokerage market in the city. we're on the corcoran side, as you know. but it is becoming better and cheaper to own than to rent. there are a number of sources of data on that point. axio metrics which is a firm that follows the rental industry, in 98 out of 100 markets tested, it was cheaper to own than to rent. multi-family industry has literally priced itself out of the market and we are the beneficiary of that. >> finally, mr. smith, a number of hedge funds, large money management funds bought the convertible debentures. we focus on the 180-day lockup. do you expect there will be a lot of selling when that 180 days expires? >> i have no idea what they'll do long term. listen, i'm not focused on that. i'm focused on running the company, doing what's best for shareholders and that's why we're here today. >> you're having a good day so far. thanks for joining us. i want to get back to our big news of the morning. sprint shares still up sharply on our reports and others that

japanese company softbank in advance talks to buy a majority stake in the wireless company. some have put the overall expenditure at around $12.8 billion to $13 billion. i'll leave that so some others. sprint shares, interesting, jim, they are off the highs. >> yes. >> obviously we pointed out a number of significant questions that need to be answered, in terms of reporting of moi oy owd others. one, what is the actual premium that's going to be offered by softbank to acquire this, perhaps as much as 75% stake in the company and will they go for it? >> meanwhile, clearwire keeps going higher even as sprint has peaked today. that clearwater common stock had been thought of as a dead stock. >> right. a company that's got an enormous amount of debt, as i reported. softbank's main focus, in part, has been on the spectrum position, not just the sprint but at clearwire. therefore, part of this plan is to actually also acquire clearwire as well.

>> fascinating. because people, retail investors, love $2 stocks. dave and i were talking off camera. sprint was a $2 stock that actually worked. those are very rare. i am very hesitant to tell people to go buy clearwire, the common, because clearwire, the common, may be soon clearwire the bonds may be the play, not unlike what david just talked about with realogy where there was a major home run done if you bought another part of the capital structure that many of our watchers do not understand which we have to educate them. >> that was all institutionally budget. those are the converts that were sold to help save the company. man, it is a good day for paulson and westin asset managers, all big holders of realogy. >> i've been focusing on stocks tonight that i feel momentum guys will most come after. i have two more on my hot list today. remember we're talking about things like google and amazon. they're really coming back today. i'm going to focus some more on the hottest stocks. yesterday i told david the key to this market -- i said many times david is tractor supply at

ulta -- i'm being facetious but those are the retail stocks people will pile in to in the end because momentum funds love those names. >> jim, see you tonight on "mad." ahead on the program, a man in the midst of some major s.e.c. controversy. in fact, the s.e.c. may be about to put him out of business. he's going to make his voice heard loud and clear right here on "squawk on the street." and as facebook looks to continue to grow, one guest still to come just might hold the -- hold the coals? to boost the social network? >> cards maybe. >> cards. i hope they don't have a cold. >> don't forget this afternoon, that cnbc exclusive -- steve leisman sits down with lloyd blank fine, alan simpson and erskine bowles live 12:30 here on cnbc.

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that's tied with the president, up one in virginia, down one in florida. that's essentially an even race. between those two you've got 42 electoral votes are you talking about. mitt romney remains down in the state of ohio. that is one his campaign believes he must win to get to 270 electoral votes. he's down six, 51%-45% in that state. however, mitt romney got on a wave in denver last week and paul ryan has a chance tonight, guys, to continue that momentum, an interesting match-up, we've seen it before of an older, experienced vice president, a younger less tested running mate. we saw it with dick cheney and with john edwards in 2004. dick cheney got the better of that. we saw it with lloyd benson and dan quayle in 1988. it appeared that lloyd benson got the better of that, but of course george bush and dan quayle won the election. i talked to dan quayle yesterday -- or a few days ago, rather, he said he thinks he helped george h.w. bush in that race, even though he got smacked

down with that "you're no jack kennedy" line, because he took the fight to michael dukakis and that's the bottom line that you hear from people who have been through these debates, is that the key for vice presidential candidates, guys, is for them to focus their fire not on the counter pa counterpart standing across the stage from them but rather, on the top of the other ticket. you can expect joe biden's going to be very aggressive in going after mitt romney, perhaps using paul ryan and his budget plan to do that. and paul ryan's going to return the favor and go after barack obama. it is going to be an interesting night here in danville, center college which has hosted these debates before. guys? >> john, we look forward to seeing it upon thsee ing it tonight. more on the sprint news this morning, former president and ceo of verizon wireless and author of "managers can you hear me now," denny stregl, good to

see you. first i want to start off with the sprint news. should a deal proceed between softbank and sprint, how will that change the landscape and create a new competitor against a verizon and an at&t? >> melissa, i'm not sure that it will have a significant impact on the landscape. overall i think that if this deal does come to fruition and we'll know within probably the next several days, i think it would be good for sprint. i know dan hesse. the sprint ceo. he's an aggressive guy. he's a smart guy and i'm sure he'll do what's in the best interest of the sprint shareholders. overall obviously since the nextel acquisition years ago, dan has been working his team through some very difficult times and has made a relatively good progress going forward. look at the stock price. it has doubled over the course of the last few years. i think they're in a good position but the fact of the matter is that they are half the size in terms of customers of

verizon and of at&t. so do they need some help? yes. i think overall this could be a very good move for sprint. >> denny, it is david faber. you of course helped build verizon wireless into the giant it is. it is a duopoly for the most part in this country, many would say. do you think softbank -- i don't even know if you know the company well or not. my reporting has been they are very much focused on the spectrum position not only at sprint but at clearwire and see the opportunity to maybe develop services that aren't out there as yet to compete against that duopo duopoly. does that make sense to you? >> david, as i heard you all report it morning, whether clearwire is a good investment i think remains to be seen. it obviously has struggled over the last number of years. if that's what softbank's play is in this, frankly, i wish them well. i wish them luck. >> okay. >> dennis, let's talk about the original reason we had you on, that's the vice presidential debate is tonight. after the bounce that romney got

off the presidential debate, seems vice president biden has the onus on him to sort of reverse that momentum or help reverse that momentum that romney has gained. >> well, melissa, undoubtedly, as we all know, the momentum has gone with the romney-ryan camp. sure. you look at both of these gentlemen, they've both been in the political cal scescene for time. most of us have already formed an opinion of vice president biden. four years working with president obama. two presidential campaigns and 40 years in washington. i think we have an understanding of who joe biden is and what he stands for. on the other side of the equation, i'm personally excited to see congressman ryan tonight. he's a smart guy. he's in command of details. i am very hopeful that he will be able to carry forth the momentum that the romney

campaign got out of the first presidential debate. >> how do you think he should play that? because the lead article in the "washington post" today notes how -- an emphasis in tone governor romney is tracking to the center for obvious reasons as we get closer to the vote. do you think ryan should do the same or double down on his conservative heritage for what that could do to get the vote out on the gop side? >> simon, i think what ryan should actually do is follow the boss' lead and i think that it's gotten the campaign to where they are today. they have the momentum. and i would like to see congressman ryan keep it going. i think can he do every bit of that. when you think about what the issues are here, there is such a sharp contrast, differences, between the two campaigns. and i think vice president biden actually has got to make up for some of the lost ground that the president got their campaign into last week.

i think it's a very tough uphill battle for vice president biden. if he comes across tonight as too aggressive, i mean he needs to be aggressive. but if he's an attack dog, i think he's going to push them further into a hole. i think that congressman ryan, based on what i've seen over the course of the last several months, he is very thoughtful. he's calm, he collects his thoughts and he portrays a very good image for the campaign. >> dennis, we'll leave it there. thank for your time and analysis on two very important topics today. sprint and the debate. >> don't tonight miss our coverage of the debate right here on cnbc. anchored by our own carl quintanilla who will join us in the next hour. a man in the midst of some major s.e.c. controversy, sean eagan, is making his voice loud and clear right here on "squawk

on the street." steve leisman sits down with lloyd blankfein, alan simpson and erskine bowles. yes, 12:30 here on cnbc.

the s.e.c. is taking action against eagan jones ratings company for, it claims, misrepresenting the companies it rated. the charge is stated that the credit ratings agency has been exaggerating its expertise repeatedly, including the number of securities that it rates and the years that it's been rating them. eagan jones has been under fire, of course, for its calls made on jeffries and in september, you may recall that it downgraded america's credit ratings to aa-minus. the man at the center of that storm, sean eagan, the family principal of eagan jones joins us here on the floor of the stock exchange. you're clearly a man who feels wronged. >> that's correct. typically people fight the government when they believe they can win or if they want a spotlight on the issue. in our case it is both of those. by the way, it is not repeatedly. this concerns an application in

2008. there wasn't any problem with the 2009, '10, '11 or '12. >> let's bring all the viewers along with this. central to the business is the fact that you are judged a nationally recognized statistical rating organization by the s.e.c. there are nine or ten of you. therefore, everybody -- >> nine. >> nine of you. like moody's, s&p. they can say we take your ratings and legally they are enforceable. they comprise with the contracts we have. the central allegation is that you were not rating enough assets on the application in 2008 to get that status, and then in the certification every year afterwards, i understand. >> simon, there's a lot of moving parts here. best way to think about this -- at least the way i think about it -- is like organic farming, that we started issuing ratings in '95 but we did it differently than the other firms. just like organic farming is different than ordinary farming. we don't get paid by the issuers. we get paid by institutional

investors. therefore, we side step a major problem. >> that's the -- the issue is are you abiding by the s.e.c. rules? the s.e.c. rules -- you said you are 150 outstanding abc issuer ratings. they say simply you didn't, therefore you didn't comply with the rules. you keep saying you've got that in the certification and you don't. >> this will be the essence of the suit and the hearing is on november 13. and our -- in our view it actually goes beyond the specifics of that. the real issue here in our opinion is a freedom of speech issue. the reason, if you look at the chronology in the case, we are being treated -- despite the fact that s&p -- the other rating firms have had massively inflated ratings according to two significant studies --

>> you are -- >> let me continue. >> you are talking about another company. one other fundamental criticism that they have that could seriously impact your business. second allegation is that you inaccurately stated that the firm did not know whether clients who paid for the ratings were long or short. they say in at least three instances you personally knew where the clients had a long or short position and you had two analysts who helped to sign ratings for issuers through securities they also knew about. you knew the positioning in the market and effectively you lied to the s.e.c. is the allegation. >> let's put this in perspective. there are about 5,000 ratings that go out the door every single year. the fact that somebody e-mailed me directly, possibly, e-mailed me directly and said, we might have a position or are interested in such and such has nothing to do with the timeliness or accuracy of the ratings. if i know what one client has or will do, it doesn't help all the other clients. it's ludicrous. let me continue!

it's ludicrous to say that we are going to skew our ratings for the benefit of one single client and hurt all the other clients. it's crazy. we won't do that! >> but you did know because you changed the rules. you did know what the positions were. >> we have so many ratings going out the door. the fact that something might have slipped through in the e-mail -- first of all of, i don't even know that i read the e-mail. it doesn't skew the ratings. not only that, if we are being paid by the issuers, we know in each case what the people are paying for the service what they want. they want a higher rating. in our case if somebody has a position, let's say they had a position on gm. they're long gm before the bankruptcy. we were saying publicly g mr. is going bankrupt. are we going to skew our ratings and say, no, gm isn't going to go bankrupt? we'd be foolish to do that. we're better off telling that client gm is in trouble, it is going to go bankrupt and listen to our ratings. you can do your own research, too, but we think it is going to go bankrupt. therefore the whole issue here is timely, accurate ratings. >> why do you think they're

doing it? >> there is a number of studies that say we have much more timely and accurate ratings than any of the other firms. i think it is a kill the chicken, scare the monkey story. >> what does that mean? >> it is a chinese saying which is that we got into this trouble because we are outspoken primarily on our sovereign ratings and the whole issue here -- >> wait a minute, hold on. you've been certainly leading the charge in terms of downgrading a lot of european sovereign ratings ahead of s&p and moody's but that hasn't -- those downgrades, with all due respect, have not necessarily moved the markets. i mean we haven't seen the big moves that we've seen with an s&p or moody's enters the market and downgrades the sovereign rate. where we did see your impact, sean, was with jeffries. you think if this goes back to jeffries when you caused that stock to go into a tailspin and jeffries came out on the defensive? >> which one do you want me to answer? the europeans, u.s. or jeffries? >> jeffries. >> jeffries. >> jeffries. terrific. jeffries, if you are using the

scorecard of the other rating firms -- we don't necessarily and other people don't. but since our action, s&p put on a negative outlook earlier in the year. moody's put out a negative watch last month. so if you're viewing that, okay. and that was after they cut the assets from 50 billion down to 15 billion. it is a significant deleveraging and even with that, the other rating firms took negative action. so you can say -- by the way, we have 24, 27 notches in our ratings scale. we downgraded them one notch. okay? one notch. i think it was from bbb to bbb-minus. that's it. i'm sorry if the market overreacted to it. it is one notch downgrade. even though -- and that was post-mf global. the idea -- it is hard to argue with this -- that the environment has clanged for the middle tier institutional growth firm dealers. >> what happens next? when will you get a resolution?

and if you lose this nrsro status, do you go out of business? >> no. no. the firm is fine. we're doing very well. people charge us on our calls. our calls have been better than ever. spain was just downgraded two notches last night by another rating firm. we continue to be ahead of the pack. that's what people are paying for and we'll continue with that. our view is we like some change after the near meltdown of the western world, nothing has changed really in this industry. we're trying to change it. hopefully we'll be successful. >> sean egan, thank you for your time. we reached out to the s.e.c. and they gave us this statement. s.e.c.'s division of enforcement alleges that egan-jones willfully violated exchange act sections. the division of enforcement further alleges that by the conduct described above, egan willfully made or caused ejr to make material misstatements in its form nrsro. they said they had no further comment and they stand by the charges. let's get to sharon epperson for some breaking news. natural gas inventories are out.

sharon. >> natural gas inventories rose by 72 billion cubic feet in the last week and this is a very bullish number because traders were anticipating that the increase would be somewhere between 76 and 80 bcf. that's still far left than we normally see for this time of year. we're looking at a significant rally here in natural gas. national gas futures appear to be at the highest levels of the year. $3.59 per million british thermal units. that was the high of the session. right as that number came out. again, there is a great deal of concern of whether or not we will see supply actually meet the escalating demand. that's something that morgan stanley pointed out in a note this morning when they said they believe we will see natural gas prices at $5 in the first quarter. so continue to watch what is happening here with prices above $3 and whether we continue to see the switch from coal to natural gas if that will continue. some traders say above $3 doesn't make it economical, but right now we are looking at

prices that are continuing to rally significantly above that mark. back to you. >> thank you very much, sharon epperson. we've got our third of the fourth ipo of today that just began trading over at the nasdaq, kythera biopharmaceuticals up 23% now trading at $19 and change. again, one of those ipos that was oversubscribed. brisk demand here and a strong pop right out of the gate. just an update on shutterstock, that stock is up by 29% and realogy maintains its pop, it is up 28% so far. still to come, what paul ryan needs to say tonight in the vice presidential debate. the chairman of the house republican conference, jeb hensarling is here to talk taxes, swing states and mitt romney's plan to win the white house. donts miss our cnbc exclusive this afternoon -- steve leisman sits down with gold man saks' lloyd blankfein, alan simpson and erskine bowles 12:30 eastern. leisman is making his way to the post to give us a preview and to

tell us how you can get involved in what is another cnbc exclusive.

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let's go to washington now where eamon javers has breaking news out of the treasury department. >> the treasury department is enlisting the help of american banks in the fight against the violent gang ms-13. the treasury within the past couple of minutes announcing

that it is designating ms-13 and blocking the assets of persons affiliated with that drug gang. let me bring you here to the key sentence for american banks because this is where compliance offices are going to have to pay attention. they're saying as a result of today's action, any property or property interests in the united states or in the possession or control of us persons in which ms-13 has an interest are blocked and u.s. persons -- that includes banks -- are prohibited from engaging in transactions with ms-13. guys, banks are going to have to carefully comb through all of their assets looking for anything that's affiliated with ms-13 here. it is an effort to crack down on what the treasury calls transnational criminal organizations. back to you. >> thank you very much, eamon. we're now 1:08 minutes into the trade. 10:30 on the east coast, 7:30 on west coast. it is an upbeat start for realogy, rising 26% and the online stock photo provider

shutterstock jumping 29% on its wall street debut. safeway is one of today's biggest decliners in the s&p 500. the supermarket chain down 5% on weaker than expected quarterly sales. and the average rate on a 30-year fixed mortgage rising from a record low, up now to 3.39% according to freddie mac. a 50-year at 2.7%. >> wow. that's attractive. the fallout over jpmorgan's trading blunder has played a role -- may have played a role in the cfo's decision to step down. cnbc's kate kelly joins us now with more details on this story. >> reporter: as cfo with a huge bank with six major divisions, no one holds doug braunstein personally responsely for the london whale debacle but he's one of a series of retiring executives in the wake of that crisis. he took the cfo post in 2010. he was increasingly worn down by the demands of the job, i am

told, including whole whale situation which threw everybody in a tailspin starting in may. like many former investment bankers, alan schwartz formerly of bear stearns comes to mind. braunstein played a key role in helping jpmorgan secure a role in united health's $5 billion acquisition of the brazilian health care provider just this week, just as he's crunching for earnings on friday. braunstein may stick around for another couple of quarters while he figures out whether to stay, go, return to banking, but in the meantime there is no obvious successor. matt zanes while clearly qualified might regard the cfo position at least if it were stand-alone as a demotion considering that right now he oversees braunstein which was part of the transition they made a couple of months ago. other people with relevant skill sets mid include blythe blasters, once the cfo of the investment bank. there are questions whether she'd want to do that.

and possibly a name you may not have heard, the cfo of the ib, albeit on a larger scale. that department has been scaled up since masters moved on to commodities. lots of possibilities, guys. although no obvious successors. that's not to say they don't have anyone who's qualified, of course. >> i know doug well. my sense is it became an extraordinarily difficult job, and continues to be one, and that reorganization perhaps that occurred maybe cut off some up side in terms of a particular career path. what's your take on that? i mean how much is london whale and how much is just the overall difficulty of the job and perhaps lack of up side -- >> i think a lot of it is the latter. one thing that's been pointed out to me a few times today is, you take a big pay cut actually if you go from being an investment banker or being a hefd commodities or something like that to becoming cfo. that was i'm sure a factor. at the same time, it is in a massive job. this is a company with a market

cap of what? $160 billion? i mean getting earnings together every quarter within two weeks and making sure they're audited and you're ready to sort of articulate the message is a huge job. very fatiguing, i'm sure. obviously this london whale disaster while not doug's business and not his responsibility per se, it must have added a lot of stress and a lot of questions to the ledger. so i'm sure there is a fatigue factor. he's only been in the job 2 1/2 years or so. i do think in general on wall street, david, we're seeing a lot of turnover on these cfo rules. don't you think? it is rare to see swomeone ther before the ipo. >> the regulatory regime is a very difficult one which makes the jobs as those kinds of firms also very difficult. kate, thank you very much. >> my money's on blythe. you've all heard about the sprint and softbank potential thing. but now we're also hearing cooper tires. a report that perhaps apollo

tire may take a majority stake in cooper tire. shares today up significantly in trading at twice the average daily volume. no comment from either of the firms. guys, back to you. >> thank you, bertha. very big day for david faber reporting on the program. sprint shares jumping on news the wireless carrier could get bought by a japanese stutor. don't miss the interaction between david and the analyst. as we wait, steve leisman's interview with simpson bowles and lloyd blankfein, the man at helm of goldman sachs. a man on the deficit reduction committee and voted against simpson-bowles will tell us why he didn't like it and what he wants to hear in tonight's vp debate. oh...there you go.

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simpson and erskine bowles. steve joins us for a preview. >> you thought you guys were going to tell me what to ask. not a preview. look, this is a very, very interesting time where no diminution, no decline at all of the concern on the fiscal side but politics is overlaying everything right now. so how do you try to make sense in you have the fiscal cliff looming one step closer every day. when i think about what the issues are that are out there, i want to know how imminent they think the fiscal cliff is, do they think there's anything that can be done about it. simpson-bowles as a brand has kind of gone up. but when i look at the political support for it, it's really come down quite a bit. grover norquist wrote a piece about five reasons why conservatives hate simpson-bowles. chuck schumer on the other side talking about why democrats don't like simpson-bowles. >> the optics of this is very

interesting. jamie dimon said if we'd have adopted simpson-bowles way back we'd be better off right now, the economy would be gangbusters at this point. so the day after we've got lloyd blankfein essentially standing alongside these two seemingly endorsing it as well. we have these two major bank ceos aligning themselves with this plan. doesn't that change the -- >> it's interesting what they've been saying, melissa. frankly, it makes a lot of sense to me from an economics point of view. i don't know if it was jamie or blankfein who said -- imagine the stimulus to the economy if we could eliminate the uncertainty created by the fiscal cliff. it would be like spending -- i don't know -- some huge amount of money. it would be like a qe4 in and of itself. >> would it be possible to mention the elephant that's standing in the room? that is the fact that you've got an interview with lloyd blankfein. good morning, lloyd. he doesn't very often do interviews. i see at the end of the month greg smith who of course announced his resignation from goldman sachs in an op-ed i think in the "new york times"

has his book out. why is blankfein now coming in to the public sphere and, though it is great to have an exclusive with the man, great, i love cnbc, why is he flanking himself in this fiscal cliff debate? why can't he just come out and talk about goldman? >> i think there is a little bit of the answer in that. part of what blankfein told our gary kaminsky back a few months ago -- >> was it that recently we had an interview? >> it was a couple months. he said we have not done a good job with the muscle. we haven't flexed that muscle. we don't have retail clients, we have wholesale clients and we need to do a better job of explaining ourselves. as you point out, on the cusp of this book coming out they want to put their best foot forward. for the record i want it known that simon equated blankfein with the elephant, not me. >> steve, i look forward to the interview in part because bowles and simpson are both rather outspoken.

interestingly, bowles, a democrat, has been fairly critical of the president in the past in terms of what he thought was abandoning their plan, and simpson has been quite critical of elements of the republican party because he, of course, wa party. he, of course, was a moderate in many way. i'd love to hear from both of them. may also want to ask mr. bowles, it's been around lately. is it possible he would be treasury secretary if obama gets re-elected. >> i think both of these guys, even lloyd blankfein come from a place maybe you and i both come from. black fine recently -- to kaminsky described himself as a rockefeller republican. i think bowles and simpson come from a political process where they were much more used to fighting the fight. when the fight is done it's over and you create the compromise. when you hear both of these guys criticizing the other side, i think they're trying to send this message, guys, it's time to get back to here here as a messa message. >> do you think lloyd will run

for public office when he's left goldman sax maman sachs or to d within a team? >> have you noted his km in front of congress and the like? he's not a very good public speaker. >> no. >> not particularly good on the public stage. >> paulson -- hank paulson was very a very specific time in history. i don't think there'll be another gold mman sachs chairma as treasury secretary for a very long time. >> steve, we look forward to the interview. again, 12:30 eastern time on the halftime report. >> three guys. the elephant in the room. alex simpson. >> three titans. still ahead, a top analyst weighs in on the big news.

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all right. want to take a look at shares of clear wire right now. we've been talking a graelt deal, of course, about sprint. we're going to talk more about it in a minute. clear wire shares up -- you should supposed to talk about that. >> i was supposed to. you came up. i try to go with the flow. >> i'm going with the flow, too. there's clearwire up over 36%. couple things to keep in mind as i reported. if the bank succeeds in the deal to require a majority control of

sprint, sprint would also potentially at the same time buy clearwire as part of the deal. clearwire does have a funding gap. speculation, perhaps 800 to a billion dollars of its debt. soft bank is interested in speck trul. it makes a great deal of sense. clearwire is a heavily indebted company. very positive for cash flee given the interest pay they pay on their debt would go down sharply. you see that up far more than sprint shares at this point. all right. back to that news. of course, as we've been saying, soft bank in advance talks to buy sprint or at least buy majority control of sprint. could be spending as much as 12.8 billi$12.8 billion. james mormon is an analyst at s&p capital iq. does this make sense to you? >> in some parts. it makes more sense when you wrap in the clearwire part of the deal.

sprint alone, it's kind of a little bit -- doesn't make a lot of sense. when you look at clearwire all the spectrums they have. also the fact they're depliing tdd/lte, a technology most likely deployed in most areas of asia, it makes a little more sense. the fact clearwire has so much spectrum. sprint itself, not so much. when you wrap in clearwire and the issues sprint has had with clearwire, that area makes a lot more sense to the deal. >> i'm glad you mentioned it, jim. i can tell you from my reporting that is the deal at least under consideration. we'll see if they get to the finish line. clearwire an important component of it from what i understood and have been reporting. as for sprint, i do wonder, there's going to be potentially a shareholder vote here. you're talking about a company some people think could do as much as a buck a share in free cash flow in call it 2014/'15. would they really want to sell

let's call it 6.50 a share? >> i think that's why we need to see a lot more of the details. as i put out in my note, when i looked at the numbers, i looked at it in the report i saw i came up around 6.33. i have a 12-month target price. not including majority ownership. i think it's a little bit light. i think it really comes down to how clearwire is evolved into the deal and what those terms are. i think that might make it the part of the puzzle we might be missing now. as it stands now, as i've said, i think it's a little light. >> yeah. i'm going to get on the clearwire, try to add those pieces to the puzzle. what are you telling people to do with sprint up sharply and clearwire up sharply? >> i don't cover clearwire. i cover sprint. i have a buy opinion on the shares. with the turnaround they have going on, not even looking at the deal i think it's a very attractive company. >> leave it there. james moorman, s&p capital iq. as you just heard from the

man himself, be sure to catch a cnbc exclusive interview this afternoon. sitting down with blankfein, simpson and bowles. back in two. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear.

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i'm sharon epperson at the nymex with breaking news on petroleum inver toirs in the energy department. oil supplies rose by 1.7 million barrels in the past week up by 1.7 million barrels basically in line with expectations. gasoline supplies were down by 500,000 barrels. gasoline supplies fell by 500,000 barrels, a bit weaker than many analysts had expected. and we saw a decline in distillate fuel supply, greater than expectations, down by 3.2 million barrels. this number is still not as great as the decline we saw reported by the industry group the american petroleum institute yesterday. they said a decline of 6 million barrels was reported. we are looking at a rally here, though, still across the board in the energy complex. and oil prices above $92 a barrel. back to you, carl. >> thanks so much. it has been a busy, busy morning. here's what you might have

missed on "squawk on the street" if you're just tuning in. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> you've had a view during this campaign. that's what we need to debate here tonight. so to say, you know, well, never mind, that doesn't work. the challenge for vice president biden because you don't know who you're going to facing in terms of the issues, is going to be the challenge for congressman ryan he's got to keep track of all the different positions governor romney has taken and decide which is the position du jour for today. softbank's talks to acquire what sources tell me would be roughly a 75% stake in sprint. it's really extraordinary that they're doing this. dan he issy, ceo has said over and over again he doesn't need the money. obviously who's going to turn down free money? the opening bell. thursday morning. they'll certainly be stronger with the right regulation. what's interesting is the recovery is occurring in spite of that.

that's a very strong testament as to the strength of housing right now. say that we are going to skew our ratings for the benefit of one single client and hurt all the other clients. it's crazy. we don't do that. >> you did know because you changed the rules. you did know what the positions were. >> simon, we have so many readings going out the door. the fact that something might have slipped through in the e-mail, first of all, i don't even know that i've read the e-mail. it doesn't skew the ratings. welcome to the third hour of "squawk on the street." let's get a check on the markets on this thursday. for the first time in about four sessions, the dow has a green arrow in front of it. up 81 points. s&p up 11. nasdaq up 23. good news on claims today. m and a rumors. foreclosures at a five-year low. then the ipos. all four of today's ipo opinion the nyse and nasdaq have started trading. all sharply higher in their

debut. re japan's softbank considering buying a stake in sprint. our own david faber reports a price has not been fully nailed down and that part of the deal would involve the purchase of clearwire. vice presidential nominee paul ryan facing off with vice president joe biden tonight in danville, kentucky. stakes are i as polls show a tightening race. congressman jeb hencerling joins us. facebook's quest for revenue growth prompting the launch of its "want" button. we'll talk to one company talkitalk i -- helping. how big brands are getting involved in the election and possibly even predicting its results. and we are getting closer to exclusive interview with goldman sachs ceo lloyd blankfein.

we'll start with politics, though. counting down to tonight's vice presidential debate and that interview with allen simpson, bowles and blankfein. who better to speak with then texas congressman jeff hensarling? congressman, good to see you. good morning. >> hey, carl, thanks for having me here today. >> want to talk some debate. but first, we're only about an hour and a half away from this interview with blankfein and bowles. we said you're on the commission. you voted against it. what do you make of what appears to be a new and improved attempt at this process, this time with the involvement of some of the nation's most high-profile ceos? >> well, any time we have people who are trying to heighten the sensitivity of our fellow countrymen about the threat of the debt, i view this to be a good thing. i think there are a lot of good things to come out of simpson-bowles.

as you well know they fundamentally did not deal with the problem. they had just passed the affordable care act known as obama care. they weren't willing to touch that. fundamentally they left medicare alone to go bankrupt. i don't know what they have said in public. but privately they will say, yeah, they took that off the table. they did wonderful work on tax reform. they did a lot of great work on the discretionary side of the budget. they did great work in the social security area. but even the president himself has said that the drivers of our debt are medicare, medicaid and health care. nothing else comes close. you know, what i fault the president for is he has no plan to deal with programs that have been of great comfort to my parents, but will make my children go bankrupt. so any time people are focusing on simpson-bowles and the problem, i think this is a good thing. we've got a president as you well know who's run up more debt in three years than in the last 200. >> although what i'm hearing you say, correct me if i'm wrong, is that you see it unlikely that

this -- that the commission's plan could be amended in a way that would eventually get your vote. is that what you're telling us? >> no. you didn't hear me say that. i want to see fundamental reform of medicare to ensure that a program that my 84-year-old dad and 80-year-old mother rely upon, that they can still rely upon it, but to make sure it's also around for my 10-year-old daughter and my 9-year-old son. and don't believe me. go to the trustees of the social security, medicare fund and they will tell you, it is going broke. and the president offers nothing except taking $700 billion out of medicare to pay for obama care. and he offers nothing except a 15-member independent payment advisory board that will make decisions on whether or not, you know, my mother can get a hip replacement and ration the quality and access of health care. so you didn't hear me say no. i was the guy who was willing to negotiate and put something on the table that i didn't want to

do. and that is tax revenues. but there was no democrat, no democrat willing to put fundamental entitlement reform to save medicare and medicaid for the next generation. wasn't put on the table. nobody can point to it. >> we will find out today, perhaps, if that does change. the debate tonight, i suppose you're here to tell me what a great debater joe biden is and how much experience he has doing this kind of thing. >> well, you know for a fact he's experienced. he's had 18 different presidential and vice presidential debates. he's debated in the u.s. senate for decades. he's very good at debate. not always so good on the stump. but he's very good at debate. unfortunately for him, whatever his style is on the substance he's got to defend the president's record. which we have 28 million of our fellow countrymen who can't find full-time work and need it to pay the bills. he's got to defend almost half

of america according to the sen poverty level. all they're offering is a tax increase that's going to impact 1 million small businesses. according to the national federation of independent business will cost us 700,000 jobs. i think the vice president, however great he is on style, he's not going to do so well on substance and trying to defend the worst economy since the great depression. >> you see the onus on him rather than congressman ryan proving himself able to stand on a stage with a man who's a heart beat away from the presidency? >> oh, i think it's going to be obvious to the american people. i mean, listen, when i listen to some of the things that vice president biden has said in the past, you know, not only has he embarrassed himself, he's embarrassed our country. he just doesn't happen to say it in a debate forum. one thing he did get right is

that for the last four years the middle class has been buried. and they've been buried by these policies. paul ryan is a guy who comes from the heartland of america. he represents the values of middle income families all across this nation. he knows this budget better than anybody in congress. and he knows pro-growth economics. he knows how to get america back to work. and he knows how to quit spending money we don't have. listen, the people who know paul ryan, you're not going to find a guy who has a purer heart, a smarter intellect and a smaller ego. america is very much going to appreciate the paul ryan that they see tonight. >> we will -- you said he has no intellectual peer in congress. we'll see how that plays itself out tonight. congressman, good to see you. have fun. jeff hensarling joins us from danville, kentucky. capital markets op-ed. gary kaminsky. man, has there been a lot of news about jpmorgan in the past 24 hours. >> there has been. i'm standing here with judge. he's prepping for his show.

he takes the best notes. >> it's called organization. >> judge, stay with it. the news today about bronstein, the cfo. sell side analystings are out there sort of saying this makes sense. there's a transition. blah, blah, blah. the interesting thing what they say in writing when it comes to jpmorg prkpmorgan and what they to their clinlt clients is totally different. there continues to be turnover for whatever reasons. there's not a clear succession path there. that's primarily the main thing long-term investors want to know. that has to do with the fact dimon is a larger than life ceo. we know about that. speaking of dimon, he was out yesterday saying a couple of things. i want to play a clip of what he said yesterday related to the bear stearns acquisition. >> we were asked to buy bear

stearns. ed that -- >> carl, several weeks ago we called somebody out for trying to rewrite history. we promised the viewers if they try to rewrite history, we're going to call them out. jamie, we know you're trying to rewrite history here. the fact of the matter is i was there in april 2008. i know what the meetings were. i know exactly what happened. the point was if, in fact, this deal went through the value of the building alone, the building down on madison avenue made this deal an acretive acquisition for jpmorgan. the liabilities were well known at the time. everybody knew exactly what was happening. the fact of the matter is don't rewrite history, jamie. jamie's had a bad six months, carl. you know who's had a very good six months? lloyd blankfein. remember, i sat down with lloyd

blankfein in april. i asked him a question about politics. this is what lloyd had to say six months ago. >> i'm a rockefeller republican. registered democrat and rockefeller republican. i'm probably conservative on fiscal issues and more liberal on social issues. and where that -- where that will get me, i'm not sure yet. >> obviously i bring that up because of the upcoming interview we have later today at 12:30 with steve liesman. with bowles and blankfein. kind of interesting he said that six months ago, carl, when you think about what the role will be here likely in terms of trying to bring resurrection of this bipartisan -- breaking news back to you, carl. this is why lloyd blankfein may be the right person to be there later today. back to you. david faber has joined me here post 9 with breaking news. >> more details on a story we've been talking about all morning. that being softbank's talks with sprint to acquire a majority position in the telecom company.

the company, sprint, confirmed the talks are ongoing. they're currently engaged in discussions. in a statement they put out moments ago they say there's a potential substantial investment by softbank and sprint. no assurances, of course, as usual they say discussions will result in the tran saks or terms -- the talks are perhaps as little as a week to two weeks away from fruition in terms of a deal. although that could always change. and they have been focused on a deal under which softbank would acquire as much as 70% to 75% of the overall company. but structure is something we don't know a great deal about including price. and as i've reported, carl, as well, clearwire is a part of this. an important component of these talks, whether they would buy sprint. at the same time then sprint would go with cash taking in from softbank and buy what it doesn't. >> reporter: own in clearwire. clearwire shares have been a real beneficiary of our

reporting this morning as well. no statement yet from clearwire. we do have confirmation from sprint about the talks. >> does it suggest to you that this would be the end of this? or is this chapter one and maybe a larger acquisition story in that sector? >> it looks as though actually we're more towards the end game. as i reported earlier t-mobile had been a part of these talks originally when they began over the summer. the idea being you would get t-mobile and sprint together. softbank would come in with a huge equity infusion, take out to a certain extent deutsche telecom which owns t-mobile. that's what they were working with. apparently softbank's interest in spectrum at sprint and clearwire continues to drive them to want to do this deal even though t-mobile has since moved on. >> good stuff. when we come back this morning, the ceo of fab.com speaking out about how the shopping website is actually helping get the facebook "want" button off the ground.

don't forget to tune in for the exclusive interview lloyd blank fine along with alan simpson and erskine bowles. don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know.

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dow is erasing some of its gains this morning. let's get to the cme with rick santelli and the santelli exchange. hey, rick. >> hi, carl. it's always amazing to me how we

are all on the same page and it's almost by accident. the big topic today, of course, is that great interview that steve's going to have. because the topic of the day is debt. debt. deficits. our spending issues. reforming entitlements. what else? taxes. and tax policy. now, exactly when did all this become epicenter on the front page of what americans are going to be thinking about, a, as they watch the debate tonight, b, as they vote? i'll tell you. i have a little bit of a thought on that. let's talk about the 111th congress. the 111th congress, of course, ended with the midterms. but that's the congress that on christmas eve 2009 at 7:05 eastern a.m. passed the largest, most complicated one-party only voting piece of legislation in my lifetime. and, of course, we're talking about the health care plan. and the president himself said he's okay with calling it obama

care. here's what i want to talk about. exactly what was the issue when the president and his party had a filibuster proof senate? okay? filibuster proof. because every time i do a speaking tour and i talk about this, many people say, well, it didn't last long. it doesn't matter how long it lasted. but i was up for three hours last night researching it. of course, here's the date. from july of '09 to august of '09, filibuster proof. of course, that included two independents. one was mr. lieberman. vice presidential candidate in another day. and the other one was bernie saunders from vermont. socialist, independent, whatever you want to call it. here's the biggest slab. all told a little bit less than six months filibuster proof. and they owned the house. and they had the white house. so why is it exactly that they couldn't pass right in the midst of this on christmas eve the biggest, most complicated piece of legislation but never heard

anything about jobs, which i hear now laser beam focus. never heard anything about debt or deficits. when exactly did that come about? it was when the congress of the 111th ended for the 112th. that was the midterms in november of 2010. that's what set the agenda we're talking about today. that is the main reason the country is preoccupied. so you can resurrect things and said would haves, could haves and should haves. one thing you can't change, you can't change history. back to you. >> rick santelli, thanks so much. when we come back, from filibustering to phil lebeau. airlines are coming clean. which ones you should avoid if you want your flight to be on time and your bags to arrive in one piece. back after a short break. with 8, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.

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new data on the airlines hitting the wires a few moments ago. d.o.t. releasing its consumer report tracking flight delays, lost luggage and tarmac weights. phil lebeau live in chicago with all those numbers. >> we're talking about the month of august here which generally didn't have a whole lot of weather delays. as a result the top three airlines all turned in better than expected on-time arrival performance. average for the industry, by the way, 79%. hawaiian, alaska, delta well above that. as for the bottom three, we've talked for some time about the problems at united. this was right in the middle of those problems. they were the worst at 72.2%. there you see expressjet and jetblue. by the way the number of mishandled bags which they monitor every month remains near a record low. 3.38 bags per 1,000 passengers mishandled. again, carl, that's near a record low as fewer people are checking bags. that's why you're getting fewer complaints about mishandled

bags. >> anybody who's flown lately knows exactly where those bags are going, too. we've had so many ceos, phil, admit to you their operations this summer were a mess. do these numbers square with that anecdotely. >> generally speaking they do. we saw the eye nited numbers come in at 72% well below the industry average. we talked to jeff smizek a few weeks ago. he said we've had a lot of problems there. we've corrected the problems. i want to see what the numbers come in for september. obviously american is going to have horrible numbers in september given everything that's going on. everybody else, they generally seem as though they're doing a better job. >> phil, thanks for that. interesting numbers. see you a little later. the spain downgrade and a lot more with simon hobbs in just a moment. from local communities to local businesses.

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talk about your news around the world overnight. rate cuts in korea. a rate cut in brazil. another kind of cut from s&p regarding spain. simon hobbs here to walk us through all of that. >> as we close out on the european session what's interesting is price action is very much glass half full across the board. yes, you had s&p coming down last night to where moody's was on spanish debt. the view seems to be will it be cut one more grade to junk status? that will be the point at which you get the spanish coming through and asking for the bailout. you also, of course, had overnight the imf suggesting quite forcefully that spain and greece should be given more time to do their deficit targets. and that has helped to boost the markets. but the biggest thing coming into the close is a rumor in the

market that basel 3, that increase in the capital requirements on banks, could be delayed. phasing could be delayed beyond january 1st. check out the market action as a result at the close. >> the european markets are closing now. >> prior to that rumor in the market, we were -- there are meetings. we're trying to determine exactly what is going on within the european union. i think it's -- the national regulator wills have to determine that. will they as a pack say, okay, that phased move will not start maybe in january. maybe in the summer or maybe in 2014. we'll wait and see. certainly if you have a look at some of the major banks who might have to raise additional capital in particular, of course, those stocks have done well. these are the top gainers within the banking sector. the usual guys. barclays. world bank of scotland. other banks have risen to the close. here you go. in portugal.

deutsche bank, still a real issue about deutsche bank's requirement to raise cash as well. if we look at the bond market, just for the record, despite the move that you had last night from s&p coming down where moddymod moody's is on spanish debt one, notch above junk. the yields have fallen on the spanish 10-year. italy managed to auction 6 billion euros of debt really well today. they have good demand there. look at what's happening there. despite the fact you've got that downgrade on the debt still the yields over there are falling. some of the other corporates that shifted today, remember burrberry wits profit warning that we had a couple of weeks, two or three weeks ago? today they came out and said, yes, we have got that slowdown in sales. this is in the luxury end of things. however, we do not believe we'll have lower margins this year. they will not be lower than last year. if anything, they might raise. they're now coming back.

other luxury goods operators around europe have also been bolstered on that. lvmh. christian dior and swatch. i want to mention one more stock to you today which i believe is suspended. this coca-cola hellenic. the bottler is going to head -- its primary listing will be in london. it's quitting -- a lot of the complaints for the shareholders has always been the taxes -- never mind the volatility. the taxes in greece were a bit of an issue. greek taxes, swiss taxes. greek taxes, swiss taxes. they're off to zurich. >> that would be like what kind of company moving offshore from the u.s.?

almost hard to imagine for us what that will do to the greek market. what a symbolic move it is for the greek market. >> certainly very symbolic. to bertha coombs. market flash. carl icahn at work again. >> nearly a 9.5% stake as of last august in oshkosh. a vehicle body maker. stocks surging this morning, tripping up the single stock circuit breaker. icahn earning 32.50 a share cash as a tender offer. saying that tender offer will not be subject to due diligence or financing. but will be subjected to the election of his nominees to the oshkosh board at the upcoming annual meeting. last year he tried to get a slate of nominees on during that meeting. what he says is that it's clear to him that management has taken a passive attitude toward the future of this company. and willing to sit back and watch what happens. housing and construction industries hoping for a positive outcome and reduced competition. asking shareholders to wait up

to four years to see what happens. he thinks things need to be much more proactive. those shares zooming here just slightly below that tender offer of $32.50 a share. >> that's one to keep our eye on this afternoon. thanks so much, bertha. another capital markets op-ed. gary, on a week where david rubenstein is on the cover of forbe's, you're going somewhere with carlyle. >> the junk craziness continues. if it's not for the junk market, add quantitative easing, the ir rational exuberance in terms of the qe, that company doesn't make it a couple years ago. a hot ipo today. ppd. the only reason i bring it up, guess who the shareholder was? that was carlyle. why do i bring up carlyle? you probably remember when that company became public several months ago we tagged it and told people this was going to be a deal that was going to work. primarily because they were pricing it right and because it

played into this whole theme about all the montizations that were going on. these guys were going to be able to do it and do it for the shareholders. look at carlyle since the ipo with the other four publicly traded private equity firms and what they've done since their ipos. do we have that screen? no. not that one. that's going to be -- i wanted to show what the performance looked like. basically, carlyle up about 17% since the ipo. there we go. take a look at apollo, blackstone, fortress, oaktree. obviously they became public at different times in terms of the capital market cycles. we did tag this one as one that was going to work. in fact, it has worked. what next for carlyle? go to the next screen, please. here it's very simple. when they became public they said the distribution of the dividend would be somewhere between 8% and 9%. given what's happening out there thanks to qe i think it's going to be at the higher end of the range. the nav funds up 5%. with the deal that became public today the montization is strong.

wind at their back quite a bit right now. they are the beneficiary. every time somebody buys, somebody sells, they're selling stuff. they are the beneficiary of what's happening in the junk world. rubenstein has gotten quite a bit of press. if you tune into squawk box tomorrow morning, rubenstein will be there. part of the special at the baron conference. ron baron second largest shareholder of this company after going public. quite an interesting segment to see what they say about the distribution which i think comes in at the high end of the range. >> interesting. are you a buyer of this notion that pe firms, the biggest problem right now is spending all the money? >> i think the biggest problem these firms have right now is making certain that they don't sell everything. because if this junk bond euphoria continues, why not try to cash out on everything you possibly can? it's great when there's buyers. i think the biggest issue going on at all these firms right now is should we sell everything. >> thank you. bob pisani is here at post 9

looking at our typical mid-morning selloff here. >> yeah. i want to follow up on that what gary was saying. apollo is delighted today with the ipo results here. we got a great ipo market today. it's been a lousy ipo market. the facebook debacle pushed everything off. finally we're seeing some real action here. i want to go through them quickly. realogy here priced at 27. high end of the range. $33 here. opened at $32.85. keep going. i want to show you shutterstock. another one down here. shutterstock priced at $17. above the range. opened at $22.50. still holding up really well. that's also doing well. this is commercial stock photography. hard to categorize. two biotech firms at the nasdaq. doesn't normally get big kinds of pops. intercept pharma priced at $15. high end of the range. opened $19 and still holding up. kythera biopharma. priced at 16. opened at $18.49.

trading up as well. you don't get big pops in biotech. this is a real big day for ipos. success across the board. let me move on. we're up today. a good portion of the reason we're up, energy stocks were really hot. a big call out of the morgan stanley this morning on natural gas. the analyst there bullish on nat gas. demand is elevated. inventory is moving from supply to a deficit. that's been going on for a while here at the surplus. and what about that switching from coal to natural gas that everybody talks about? the prices have got to rally even more for that process to sort of switch off here. really bullish overall. take a look at nat gas. important thing here, of course, been depressed for ages. finally coming well off lows. look at this. sitting right here. highs for the year on nat gas. big names are all up.

southwest, chesapeake, cabot, devon. coal stocks up as well. wait a minute. coal or nat gas, usually in opposition to each other. why are coal stocks doing so well? they've been beaten up badly. also if the prices of nat gas keep rallying they'll be less inclined to do the coal to natural gas switch occurring in the utility stocks. you've got a two-fer here. both sides of this essentially doing well. on the demand side and, of course, on prices going up, possibly helping coal. >> coal names have been up almost every day since the debate. >> remember, there has been -- yes. since, of course, governor romney said i like coal. but, remember, these stocks have been so badly beaten up that these look like fabulous rallies because the prices are so low. >> it's lasted for a long time, that poor performance. thanks, bob. let's get back to rick santelli in chicago with a special guest. rick? >> absolutely. the guest i'm going to bring in momentarily became a runner at the chicago board of trade in

1947. he became a member in 1949. yankees won the world series. the best movie was james cagny, "white heat." top of the world, ma. west germany and east germy became individual nations. soviets detonated their first atomic bomb. here's lee stern then. here's lee stern now. a member for 63 years, mr. stern. that is amazing. >> you know what's so amazing about it, i was -- i'm only 61 years old now. >> off camera, everybody was checking out mr. stern's ring. tell us a little about -- lee's ring. >> let's see. world series ring. 2005. >> chicago white sox. >> chicago white sox. there's 99 diamonds in there. everybody thought the 99 diamonds had to do with 99 wins. it had to do at that time 99 years the cubs never made the world series.

>> keep rubbing it in. why do you have that ring, lee? >> i'm a director over there. i'm the one that always says no to jerry reinsdorf when i should be saying yes. i say yes when i should be saying no. >> it isn't only baseball and trading. you owned a soccer team. the chicago sting. what year did you purchase it? >> i purchased the contract in 1974. we won the championship in '81. again in '84. it was quite a thrill. we had a major -- major parade. started right here at the board of trade. they surprised the heck out of me with it. down lasalle street. et cetera. >> your firm is still around. it hasn't all been easy. because there was a point in the '90s where several people put in erroneous trades and tried to stick lee stern's company with the trades. what did you do about that, mr. stern? >> well, we had to step up to the plate. it was either stepping up to the plate and paying out the money

to the clearing firm -- the clearinghouse or getting out of business and filing bankruptcy. that's the least thing on my mind. that was the least thing on my family's mind. >> you cut a check. about how much was it? >> i'll have to check with my wife. >> but it was millions. >> it was several million. >> this is at a time where everybody down here stood up for their trades. and maybe those days are questioned now. what's your synopsis of this industry and its future? >> well, the future's always going to be here. the industry, unfortunately, i think, takes in people that don't belong here. and it's just been -- these last -- the so-called fat fingers and all the cheating that's been going on, we need to have more people stepping up to the plate and saying, this has got to stop. >> i agree. mr. stern, member for 63 years, people! lee stern! back to you. >> that was a beautiful thing to watch. thanks so much, rick santelli in

chicago. on a programming note, my colleague melissa lee tonight on "fast money" has quite the lineup. scott gotlieb will have the outlook for the health care sector. and charlie bobrinskoy. and then eric schiffer, ceo of 99 cents only stores. the company's push to open up a store on, of all places, rodeo drive. if that wasn't enough, ice-t, musician and actor will join melissa and the gang for a very special interview. i got to see that. one of the retailers helping facebook launch its "want" button. could help the social network increase its revenue. the foundser and ceo of fab.com will join us live for some detames after this quick break. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons.

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ah, that was good. too bad nobody could hear me. geico. fifteen minutes could save you fifteen percent or more on car insurance. with the blackish-blue frame and the white dots and the splattered paint pattern, your lights are on. what? [ male announcer ] the endlessly customizable 2013 smart. special edition of halftime at the top of the hour. lloyd blank fine alongside simpson and bowles on the issue that's got america talking. that's the looming fiscal cliff. what does it mean for your money? it is a cnbc exclusive. of course, is the rally set to resume with this snap back on wall street? carl, lots coming up top of the hour. >> if the snap back lasts. up only 27. real estate holdings company realogy holdings.

ceo and president richard smith appearing on "squawk on the street" earlier to discuss the timing of the ipo. take a listen. >> this is a unique time in the history of housing. a unique time in the history of the economy of this country. this is absolutely a pure play. we're not a builder. we're not a retailer. we're not home depot or cher win williams. we represent 93% of the business. it's a terrific opportunity. >> shares are, in fact, currently trading up more than 20% higher. up 23% to $33.41. of course, you can say that about all the ipos today. all 20% above their opening price. online retailer fab.com. one of the very few retailers tapped by facebook to tap its new "want" and "collect" buttons. you might remember fab.com from when we last spoke with the company in july when the fashion forward website announced a huge round of funding of just over $100 million. first today a new fab app. joining me at post 9, jeff

goldberg is founder and ceo. welcome back. >> thanks very having me. >> let's talk about the app and specifically what mobile means to an online seller. what's going on? >> the app we're launching today is complete reimagination of the fab app. we have today over 30% of our daily business to fab come from mobile users. mostly iphone, ipad. a third of our revenue comes from mobile as well. about six months ago we said let's just rethink the entire experience. if we're thinking about fab being mobile first. today we're launching the first truly mobile first e-commerce experience with the mobile shopper in mind. we see a day very soon where over 50% of fab's usage and revenue is coming from mobile shoppers. >> from 30% to 50%. >> fab was 1.5 million members the end of this year. 10% business on mobile. now we're 8 million members. over a third of our business revenue comes from mobile. huge growth in mobile this year. >> is the mobile shopper at home on the ipad? are they in a store and are they having impulse shopping

experiences when they're out and about? what's the experience typically? >> we see now fab exists on three platforms. we're on the web which is desktop, laptop. the phone. and the tablet. we see different type of behavior amongst the three devices. what i can tell you is that iphone is definitely on the go. everywhere, what's on fab right now, the daily dose of design discovery. ipad is a little more kind of like the second platform where you might be watching tv and using your ipad. might be in your bed browsing what's on fab today. i tell you, ipad is for us right now the most interesting of all platforms. the hi we have a conversion rate of over 7% whenever someone opens our ipad app. ipad is huge. we think it's going to get even bigger. >> interesting. especially if a min i comes along. holidays. retail federation is talking 4%.

do you see things stronger than that? >> last year we tid 50% of our sales in the fourth quarter. for a relatively young company we've been gearing up for the last six months for that to happen again. we're on the pace to do somewhere around $150 million in sales this year in our second full year. and, you know, if the holidays blow it out it could be higher than that. for the most part, you know, the holiday for us means just get people great stuff that makes them smile as quickly as possible. what we've been doing is focusing on building up our warehouse, inventory, supply chain so that when people think about product discovery and color and holidays, they go to fab and have a great experience with us. >> you want to explain what the "want" button might be on facebook? >> you know, we work very closely with facebook. we're a great partner with facebook. whatever facebook says to us, we want to -- they want to innovate on ways that people can share things, collect things, like things when it comes to products and discovery, fab always raises our hand and says we want to be one of the first. we're one of, i think, four or five retailers to experiment with the collect and want

button. >> the idea is you're on facebook. right? you see -- >> the idea is you see a product or, you know, kind of an inspiration that your friend likes. you can say i collect that. almost like bookmarking it for later and saying maybe add it to my wish list, want list. i think facebook's still figuring out what to call it. the concept is huge. to be able to socially discover and shop with your friends. and then, you know, say, you know, save things for later that might interest you down the road. very exciting new step for them. >> exciting for wives who want to make hints without actually having to say it out loud. it'll be interesting to watch. everybody wants to know where facebook's headed. jeff, thanks so much. >> thank you very much. >> looking forward to talking to you more over the holidays. countdown continues to the exclusive interview with lloyd blank fine, alan simpson, erskine bowles. in about 39 minutes a lot more "squawk on the street" is coming up.

welcome back to "squawk on the street." apple shares trying to bounce off a near two-month low here after the appeals court has thrown out an injunction against the sale of galaxy's nexus phone. implemented back in august with that case that apple did win against samsung. the apeoplpeals court saying th district court, carl, had abused its discretion. apple did take down the rest of the market with it just a bit. >> apple went negative first. the dow which was up more than

70 points now up less than 20. we'll keep an eye on that. thank you very much, bertha coombs. apple tends to be leading the way. we're getting closer and closer, of course, to that exclusive interview with lloyd blank fine, alan simpson, erskine bowles. steve liesman will be talking to them live. first he'll join us for a preview after this break. [ male announcer ] it's simple physics...

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just a little over a half hour away from steve liesman's interview in lower manhattan. steve is there now getting ready for the interview. maybe first we can put it all in context. why is this all happening today? >> my guess is that these guys want to insert themselves into this political process. as you know there's two things going on. unfortunately they seem to be on separate tracks, right? we're hurdling towards the presidential election on one-half. towards the fiscal cliff on the other. these are not disconnected events. the fiscal cliff clock is ticking. it seems like the presidential race is having a huge influence. we have the vice presidential debate tonight. so the first question for me is can we avoid the fiscal cliff? can simpson/bowles help get there? are presidential kand tats

moving towards a simpson-bowles type solution or away from it. and can congress be moved toward deficit solutions. finally, what's their prescription for taking on entitlemen entitlements. what's the role of wall street and business is trying to avoid the fiscal cliff we're headed toward and creating deficit or budget sanity out there. >> steve, it's appropriate we're in baseball playoff season. because if the first commission was a swing and a miss, is there going to be some attempt at adjustment if, in fact, there is another try at this? >> you know, that's a good met t for, carl. they're still at bat. it's fascinating to think about the idea that simpson-bowles as a brand seems to have gotten more popular. people seem to know simpson-bowles at least in the general or broader public. certainly in the media. when you dig down and see what's been happening inside the beltway, it looks like simpson-bowles has become less popular. i think they're still up at bat. i think they have several more swings.